The Purpose And Nature Of Business Flashcards
Primary
The primary sector extracts raw materials from the planet.
Secondary
In the secondary sector goods are manufactured from raw materials into finished goods
Tertiary
The tertiary sector is all the support services for business
4 Primary sectors
fishing, forestry, mining, deposits.
4 Secondary sectors
Food processing
Construction
Clothing and textiles
Consumer goods
4 Tertiary sector
Hospitality industry/tourism.
Healthcare/hospitals.
Entertainment.
Broadcasting.
What do you need?
Water
Food
Shelter
What is business
A business is an organisation which trades to make money, these come in all shapes and sizes.
What is a Product?
A product is anything that is capable of satisfying customer needs, it is tangible and can be touched
Sole Trader
A sole trader is a self-employed person who owns and runs their own business as an individual.
Partnership
The Bottom Line. A partnership is a legal arrangement that allows two or more people to share responsibility for a business.
PLC
A public limited company (‘PLC’) is a company that is able to offer its shares to the public. They don’t have to offer those shares to the public, but they can.
LTD
An LTD business is a company that has been incorporated by Companies House for operation within the United Kingdom. An LTD company is a privately held commercial enterprise that has one or more registered employees. LTD companies are traditional companies and are their own legal entity
E-Commerce
E-commerce is any transaction that takes place through the internet.
Enterprise
The different skills an entrepreneur needs to possess in order to be successful. The term can also relate to a business organisation.
Inflation rate
The rise in the price of goods and services.
Raw materials
Raw materials are unprocessed basic materials from which products can be made.
Entrerprenuer
A calculated risk-taker who sets up a business in return for financial gain.
Income tax
Tax that someone pays based on their personal income (the money that they earn).
Limited Liability
When the business owner or owners are only responsible for business debts up to the value of their financial investment in the business.
Shareholders
A part owner of a private or public limited company.
Unlimited Liability
When the business owner or owners are personally responsible for all the debt of the business, no matter what the value.
Survival
Keeping the business operating for a certain amount of time.
Make Profit
They are four key areas that can help drive profibility.
Maximise profit
Profit maximisation means increasing profits by the business firms using a proper stratergy to equal marginal revenue and marginal cost.
What does the R stand for in RECIPF
Raw Materials
What does the E stand for in RECIPF
Employment
Fixed Cost
Fixed cost are expenses that stay athe same no matter what how much activity a business is doing.
Revenue
Revenue is the income that a firm receives from selling its goods or services. It is also referred to as ‘turnover’.
It is measured by the number of units sold multiplied by the price.
Total cost
Total costs are fixed costs plus variable costs.
Variable cost
Variable costs are the costs that vary directly with the business’s level of output.
What does the C stand for in RECIPF
Competitors
What does the I stand for in RECIPF
Infastructure
What does P stand for in RECIPF
Proximity market
What does the F stand for in RECIPF
Finace
What does SIC mean
Sales
Image
Cost
Business Plan
A business plan is a document setting out what a business does and what it hopes to achieve in the future.
Businnes Planning
Business planning is the process of producing a business plan.
Divedends
Dividends are the financial rewards paid out to shareholders each year.
Imports
Imports are goods and services purchased from overseas by consumers of businesses.
Quota
A quota is a limit on the number of foreign goods imported into a country.
Cost
The amount to be paid in rent or to buy a premises varies according to location. The rent for premises in the centre of London, for example, is greater than for offices in central Wales. The costs of facilities can affect the level of profit a business makes.
Image
For some products, where they are produced can have an important impact on their image. A perfume from Southampton or a wine from Bradford may struggle to sell. A language school on the coast or a gift shop in a tourist town may be more successful.
Sales
Location may affect whether or not the business gets customers. A hotel or theme park in the wrong location may struggle to attract visitors, for example.
Tariff
A tariff is a tax on foreign goods imported into a country.
Internal or Organic growth
(also known as organic growth) occurs when a business gets bigger by selling more of its products.
External growth
(also known as integration) occurs when a business gets bigger by joining or buying other businesses.
Market capitilisation
The market capitalisation of a company measures the value of all its shares:
market capitalisation = market price of a share x the number of shares
Franchise
A …….. occurs when a franchisor sells the rights to its products to a franchisee; this is usually in return for a fee and percentage of turnover.
Franchisee
A ………. buys a franchise usually in return for a fee and percentage of turnover.
Franchisor
A ……… sells a franchise usually in return for a fee and percentage of turnover.
